Politics & Prejudices: Screwing the poor, and ourselves

We love scandals in this country, usually blow them out of proportion, and then hold on to them the way medieval Christians would have cherished a splinter of the True Cross.

We can't wait for the next documentary about JonBenet Ramsey or Natalee Holloway, and I bet thousands would buy tickets and stand in line to see Monica's stained blue dress.

But there's one major scandal right here in Michigan you've probably barely heard of, and which deserves vastly more public outrage than it's gotten. More lives were devastated by this than by most corporate bankruptcies. Victims lost their houses, their savings, and what little money they had.

Twenty-thousand people were incorrectly accused of fraud by state authorities. Their assets were seized; huge fines assessed, and their wages garnished.

Yet they were all completely innocent.

Imagine if any of that had happened, say, to Dick DeVos, or even some prominent, well-heeled Democrats.

Heads would have rolled, political careers been ruined.

But the victims here were a bunch of down-on-their-luck folks who had collected unemployment insurance.

So, who cares? Here's how all this happened: To save money, presumably, Snyder appointees put in an automated system for catching unemployment insurance fraud.

Unfortunately, for more than two years it spat out charges against thousands who hadn't committed fraud at all.

Nor was this a minor annoyance. Luke Shaefer, an associate professor at both the University of Michigan School of Social Work and the Gerald R. Ford School of Public Policy, is one of the state's top experts on poverty.

He told me what happened to these people. "So, let's say they found you improperly got $3,000. Not only would you have to pay that back, but you would owe a penalty four times the amount of what you 'fraudulently' got — with interest."

They came after these folks with a vengeance, demanding their savings, grabbing their wages. Almost immediately, it was clear that something was very wrong.

Lawsuits began to be filed. But many poor folks feel helpless to challenge the system. More than $15 million was seized from people in 2015 alone. Eventually, an internal review showed that the robots running the automated system had falsely accused those who'd gotten unemployment insurance a staggering 93 percent of the time. But it went on for two years.

"They've had evidence that this was a major problem for a long time. I don't understand why it took so long," Shaefer said.

However, I think I do. As in Flint, when poor people are the ones who are suffering, it took the Snyder administration a very long time to respond. When he did, it was with all the compassion of a robot programmed to disregard emotion.

Here's what he said to the Detroit Free Press at the end of last year about this: "It's not a good thing. The system didn't work well," later adding, "I think we've made a lot of progress in addressing those issues."

One can easily imagine our relentlessly positive guv assessing global thermonuclear war in much the same way.

I wonder what the people who lost their savings and left no forwarding address would think about that.

The unemployment scandal surely hurt a lot of working poor, some of whom will probably never be reimbursed. But once again; they don't amount to much. After all, they are poor.

By the way, what consequences did those responsible suffer for this horrendous blunder?

Virtually nothing. Sharon Moffett-Massey was head of the state Unemployment Insurance Agency when all this was going down. Did she get fired on the spot, with the top administrators who oversaw this nightmare unfolding?

Well, nah. She's being "reassigned," presumably at full salary. That's pretty much what Snyder, aka our emotionally challenged First Accountant, wanted to do in Flint.

You couldn't make this stuff up.

But believe it or not, there are those worse off than the Unemployment Insurance Agency's victims. I had coincidentally spent the days before this story broke reading a fascinating short book published last year, co-authored by none other than the U of M's Shaefer, called $2.00 a day: Living on Almost Nothing in America" (Mariner Books).

Kathryn Edin, a distinguished professor at Johns Hopkins University, and Shaefer chronicle the lives of several poor families who do, indeed, struggle on less than $2 cash a day.

None are drug users or criminals. Some have had children without the support system needed to care for them, but mainly they've been unlucky. The great "welfare reform" act of 1996 was mostly good for the working poor — at least for a time.

Their benefits have since been cut back too. But for those without jobs or unable to work, it has been hell.

Some states have eliminated cash assistance entirely and, like Michigan, skillfully find ways to divert federal money meant to assist the poor into other uses, including higher education.

"There's a liberating power in cash that even conservative economists like Milton Friedman have recognized," Shaefer told me over tacos last week. To get a little cash, the poor sell their food stamps at half their value, their plasma, occasionally their bodies, and sometimes they and their children still go hungry.

Virtually all the adults we meet in this book want to work, and some have made themselves sick trying to hold down minimum wage or poorly paying jobs while juggling kids and transportation difficulties. One, a model employee at Wal-Mart, was fired when she didn't have a way to get to work one day.

After spending years studying the problem, Shaefer thinks he knows the solution; "a robust program of job creation that goes beyond anything America has undertaken since the Great Depression," coupled with support systems that make it easier for workers to stay in those jobs, by providing transportation and emergency child care options.

That may not be politically popular, but is vitally necessary if this nation is ever to really become great again. The University of Michigan was where President Lyndon Johnson proclaimed the first War on Poverty in 1964.

That war accomplished more than right-wing propaganda gives it credit for, but was, at best, a mixed success.

Last fall, U of M President Mark Schlissel announced the school was launching a major new initiative called Poverty Solutions, and that Luke Shaefer would head it.

What that will mean is still not clear. What is certain is that anything that helps the poor escape poverty helps us all.

Farewell to a grown-up

Two days after this column is published, President Barack Obama will leave office, the man who was in many ways the best president of my lifetime.

He brought the nation through the worst recession since World War II; kept us out of new wars, got the budget deficit down, and got millions health care for the first time.

By saving the auto industry, he prevented this region of the country from sinking into something that might have been worse than the Great Depression.

Through it all, he was assailed by perhaps the nastiest, most untrue, unfair, and racist assaults hurled at any president since Abraham Lincoln. He kept his cool, was civil to congressional "leaders" whose integrity was lower than a snake's belly, and was always the grown-up in the room.

Yes, he was wrong about some things. Who hasn't been? But he redeemed the promise of America, at least for a while.

We may well be going from the best to the worst. But we should remember that the career of Barack Obama proved something he once said: "in the unlikely story that is America, there has never been anything false about hope."